PMI Reports 2019 ESG Performance in Its First Integrated Report - Seite 2

The Integrated Report 2019 demonstrates how PMI is focusing its resources on developing, scientifically substantiating, and responsibly commercializing smoke-free products that are a better choice than continued smoking, with the aim of completely replacing cigarettes as soon as possible. The company believes that, with the right regulatory encouragement and support from civil society, cigarette sales can end within 10 to 15 years in many countries.

In 2016, PMI introduced a set of Key Performance Indicators (KPIs), referred to as Business Transformation Metrics, to transparently measure and verify its progress toward a world without cigarettes. In 2019, we continued to expand this set of metrics.

Highlights from our 2019 performance across these metrics include:

• PMI continued to shift significant resources toward delivering a smoke-free future, with 98 percent of total R&D expenditure and 71 percent of total commercial expenditure directed toward smoke-free products in 2019.
• PMI’s smoke-free product net revenues reached 18.7 percent of total net revenues in 2019, compared to 2.7 percent in 2016; by 2025 the company aspires to have 38 to 42 percent of total net revenues coming from smoke-free products. In 2019, net revenues from smoke-free products already exceeded 50 percent of total net revenues in four markets.
• PMI’s smoke-free product shipment volume increased to approximately 60 billion units, up from 7.7 billion in 2016 with an aspiration of more than 250 billion units by 2025. PMI’s combustible product shipment volume in 2019 declined to 732 billion units, down from 845 billion in 2016, partly reflecting the impact of adult smokers switching to our smoke-free products.
• Since announcing our smoke-free vision in 2016, PMI has delisted over 600 cigarette SKUs globally, while significantly broadening our portfolio of heated tobacco units, to over 400 SKUs.
• At year-end 2019, there were an estimated 9.7 million users worldwide who have stopped smoking and switched to PMI’s heat-not-burn smoke-free product IQOS, compared to 6.6 million in 2018. PMI’s vision of a smoke-free future is a global and inclusive one, aiming to provide access to better alternatives to all smokers around the world. Approximately half of PMI’s global cigarette sales volume is in non-OECD countries. We therefore aspire that over 20 million smokers in non-OECD countries switch to our smoke-free products by 2025, half of our global aspiration of over 40 million users by that time.

ESG highlights from the Integrated Report 2019 include: